Coinbase Adds Fixed-Rate Bitcoin-Backed USDC Loans Through Morpho Midnight

TLDR

• Coinbase has launched fixed-rate USDC loans backed by bitcoin through Morpho Midnight.
• Borrowers can lock in both the interest rate and repayment date when the loan is opened.
• The new product sits alongside Coinbase’s existing variable-rate loans through Morpho Blue.
• Coinbase says its variable-rate lending product already has more than $1.4 billion in outstanding loans backed by roughly $3 billion in collateral.
• Coinbase handles the app experience, Morpho provides the lending protocol, and transactions settle on Base.

Coinbase has added fixed-rate bitcoin-backed loans, giving users a new way to borrow USDC without selling their crypto. The product runs through Morpho Midnight and lets borrowers know their interest rate and repayment date from the start.

Introducing Borrow with @CoinbaseDev Wallets, a simple way to bring crypto-backed USDC loans directly into your app.

Browse products, open collateralized positions, and manage them over time. Starting with @Morpho Blue on @Base ↓ pic.twitter.com/8q7WzjscMx

— Coinbase Developer Platform🛡️ (@CoinbaseDev) September 22, 2026

The new option expands Coinbase’s existing onchain lending offering, which already includes variable-rate loans through Morpho Blue. Coinbase users can now choose between fixed and variable borrowing depending on how they want to manage their credit.

Coinbase Adds Fixed-Rate Loans Through Morpho Midnight

Morpho launched Midnight on Base in July to bring fixed borrowing rates and defined maturities to onchain lending. Most DeFi lending products have traditionally relied on variable interest rates that can change over time.

Coinbase is the first major consumer platform to offer Morpho Midnight loans at scale, according to Morpho. Market makers also use the protocol, while Tenor Labs previously launched a lending product using Midnight.

Interest rates are determined by supply and demand through an onchain order book. Coinbase has not publicly disclosed the specific rates currently available to borrowers.

Users can currently choose loans that mature either at the end of the current month or at the end of the following month. Coinbase defines the end of the month as the final Friday of that month.

Borrowers must repay the USDC before the maturity date. If they do not, the lender can make a claim against the bitcoin collateral backing the loan.

Coinbase Lending Already Tops $1.4 Billion

Coinbase’s existing variable-rate product has grown quickly. The company says users currently have more than $1.4 billion in outstanding loans backed by around $3 billion in collateral.

Those loans use Morpho Blue, the company’s larger variable-rate lending protocol. Morpho says Blue currently has about $5.2 billion in outstanding loans and roughly $16 billion in deposits across all integrations.

Morpho Midnight remains much smaller at this stage, with around $30 million in deposits as it continues to roll out. The Coinbase integration could increase usage by bringing the protocol directly to a large retail customer base.

The structure separates the different parts of the product. Coinbase manages the customer experience, Morpho provides the lending infrastructure, and transactions settle on Base.

Borrow Without Selling Bitcoin

The main appeal of the product is that users can access liquidity while keeping their bitcoin exposure. Instead of selling bitcoin for cash or stablecoins, customers can use the asset as collateral and borrow USDC against it.

Coinbase yield and investments product lead Jacob Frantz said fixed-rate borrowing gives users more choice in how they manage credit. The fixed structure may appeal to borrowers who prefer knowing their financing cost in advance rather than dealing with changing rates.

Morpho also sees Midnight expanding beyond bitcoin-backed loans. The protocol could eventually support structured credit products and loans backed by tokenized real-world assets.

More integrations are planned, although Morpho has not named future partners or provided a timetable. For now, Coinbase users gain another onchain borrowing option as fixed-rate DeFi lending begins to move closer to mainstream financial products.